The Aleppo City Council issued a set of decisions in early September. It considered some of the real estate properties it owns to be subjected to the Investment Law No. 106 of 1958 and for public benefit.
Decisions No. 9177-9818, as well as No. 9183, 9185 and 9187, issued on September 1, 2022, and Decision No. 9275, issued on September 6, 2022, were all published within the first part of Official Gazette Issue No. 38 on October 12, 2022. These properties are located within the neighbourhoods of Old Hamdaniyeh, Hamdaniyeh Two and Three, the tourism district, Al-Assad Suburb project, Al-Assad Suburb Villas project, and the commercial district in the city of Hanano.
Tenancy Law No. 111
The properties mentioned above were originally leased under the old Tenancy Law No. 111 of 1952 and its subsequent amendments. Under the 1952 law, tenants of these properties may not be evicted as long as they are committed to paying rent. That is because these properties were subject to compulsory extension, meaning that their lease contracts were legally extended regardless of whether the lessor – in this case, the local administrative unit – wanted to do so.
Through Law No. 111, lessors of those properties meant for commercial and industrial purposes could waive their investment in the properties to someone else through a system known as furoogh. Under this system, the tenant has the right to hand over the property, its material, and other intangible components to another tenant in exchange for a furoogh payment equivalent to the property’s real market value. The new tenant then pays rent to the original lessor, which in this case is the local administrative unit. According to Law No. 111, the administrative unit has the right to re-appraise these rental payments every three years through a court-appointed committee.
Investment Law No. 106
Investment Law No. 106 of 1958 entitled administrative units to allocate their properties for investment to perform a service of public benefit–that is, the properties provide some benefit to the public sector.
The 1958 law also allows administrative units to evict any resulting investors within two months of the eviction notice. The eviction decision may not be appealed. Subjecting the properties to Law No. 106 also aims to raise the rent value, thus increasing local councils’ financial revenues.
Previously, according to State Council Opinion No. 364 of 1971, the Minister of Agriculture was tasked with determining which properties could be considered to be in the public benefit after consulting with the public institutions where the properties were located. However, this task was later given to the executive offices of governorate councils under Minister of Local Administration Decision No. 48 of 1972.
From leasing to investment
Minister of Local Administration Decision No. 200 of 1983 gave governorate councils the authority to change the legal designation of lease contracts to investment contracts. This change meant that the contracts would be subject to Law No. 106 rather than the previous Law No. 111. However, changing the legal designation of these contracts contradicts the terms that the two parties originally agreed on.
Why Investment Law No. 106 of 1958?
It bears mentioning that the above properties in Aleppo remain subject to Law No. 106 of 1958 despite a new Investment Law No. 18 of 2021. Article 3, paragraph B of Law No. 18 says that publicly-owned properties offered by public institutions for investment are subject to the law’s provisions. The 2021 law also allows investors to transfer ownership of the investment project to others with the same rights and obligations.
In reviving Law No. 106 of 1958, the city council appears to be attempting to restrict the rights of beneficiaries and not grant them any of the advantages stipulated in the newer 2021 law.